Health Accelerator and Financial Frictions in Macroeconomic Modelling

Firano Zakaria and Filali Adib Fatine

SAGE Open, 2025, vol. 15, issue 1, 21582440251325304

Abstract: In this paper, we have developed a new approach to macroeconomic modelling by proposing to introduce the agent’s behaviour in a pandemic situation. In the form of health frictions that alter the economic agent’s behaviour in crisis situations, we have set up a DSGE model whose behavioural functions take into account the existence of healthy and infected populations. The novelty of this work is the inclusion of the two frictions; health and financial, the idea is to succeed in describing the macro-financial dynamics in a pandemic situation. The results obtained confirm the existence of a health accelerator that amplifies macroeconomic shocks. JEL classification: G21, G28, E42, E32

Keywords: health frictions; financial frictions; DSGE; COVID-19; health accelerator (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:15:y:2025:i:1:p:21582440251325304

DOI: 10.1177/21582440251325304

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